tv Fast Money Halftime Report CNBC March 5, 2012 12:00pm-1:00pm EST
higher. >> and could make huge savings. that's half the price to fill up. >> that does it for us at "squawk on the street." simon and i thank you for joining us today. as we hit noon on the east coast, let's get to the fast money halftime report. thanks so much. four hours to go until the close and here's where we stand. a down monday on wall street. at least at the noon hour. 70-point decline for the dow industrials, .5%. there's the s&p giving back nine points, the nasdaq is down the worst, down 26.5 points, a decline of nearly 1%. to the crude and gold trade, opposite directions today, crude is higher, albeit slightly, 108.64, gold is lower by .33%. 1704 an ounce. let's get to our fast five. the top stories for the "halftime show." china growth fears, should a 7.5% growth rate change your investment plans? we'll ask kmod commodity king,
dennis gartman. and yawning at yahoo big plans, the company reporting a massive restructuring. shareholders don't seem to be impressed. crude reality, oil set to hit $115. one guest says we will have more pain at the pump. automakers seeing green. can gm power profits with natural gas trucks? or does the chevy volt prove that the demand still isn't there for clean cars. and bull case for las vegas sands, why you should bet on the stock that's up 28% this year. welcome to the report. lots of trade and let's start doing it. dr. j, are you overly concerned with what's going on in china, given the fact that they lowered their growth expectations to 7.5%? >> no. the main reason i'm not overly concerned about that, scott, is that china, i don't really believe what china says, whether it's bullish or bearish. so i pay attention to what, when they speak and obviously it does move markets, so i react to your note. but as far as would i pay attention to it, for anything
more than moments in time, no, so i think that they'll say what they need to say. no matter what it might be. i don't want to invest based on what china says about its economy. >> joe, what are you doing in the market today? >> silver. gold, still short the futures, i think that's the right trade. think much about what's going on today is not so much the concerns about china, but what has been working the trades, whether it be the financials or whether it be the technology names, for the first time they're feeling a little pressure. it's in market in need of a correction. you're getting a mild correction today. risk is being taken off the table. that's the overwhelming theme. >> grasso, the levels you're watching on the floor of the stock exchange today? >> when you look at a correction, we've been waiting for that. but the levels you must watch are 1354, where we bounced last week, 1352, right there. below that it gets very interesting. it goes down to 1333. well let's be honest, all of these dips have been bought. what are your alternatives here?
you're not buying treasuries, you're still buying equities, i would watch the dips to make sure that they are bought, play it safe, but the best bet in town -- still equities. >> josh brown, the market may be concerned about what's happening in china. the market may be concerned about what's happening over in europe. but the market may get a good reason to be, maybe not as concerned about all that's going on on friday. because you're going to get the jobs report. does the jobs report give the market a chance to take another leg up, despite the other noise that i mentioned? >> yeah, i mean, i think the way to look at jobs report is very simple. that is truly the engine that's moving u.s. stocks, we get these little blips with europe and china here and there. but so long as that data continues to ameliorate, specifically if you look at it over a three-month rolling average, you see good ism, you see good manufacturing. that's what's going to be the difference between stocks being underaccumulation or stocks being underdistribution. i think it's important to watch all the other stuff. i think you're right, the jobs report will be key.
if you get an upside surprise, you're not going to want to be in treasuries over equities. >> let's move on, credit suisse says commodity demand in china is starting to peak. should you buy into that and ha does it mean for commodity prices? joining on the fast line is dennis gartman. your note this morning says i'm still very long stocks, still long gold and euro, still long gold and yen. does that all hold true? >> first of all, i'm not long of stocks. i'm actually neutral of stocks. i own shipping companies, i own tankers. but i am net short against, i'm short in beta form s&ps, i am net fruit tral on he can equities. >> in our last conversation last week you said you were neutral on stocks, but when pressed, you said you were long equities, you said you wish you could be longer. ann am i taking the read rong here? >> i was long equities until i was net long equities until last
week. i am absolutely net-neutral. i own, if you read my stuff this morning, i'm long shipping companies, i'm long tankers. i am short s&p futures, so that i have a net neutral position. i have -- i don't want buy them or sell them, except i want to own tankers and be short of s&ps, so i have no net market exposure. >> so we don't get trapped in the weeds, any further than we already are, dennis, give me your idea on this china data, right, 7.5%. what does it do in terms of your feeling on commodities from here forward? >> like the doctor said earlier. i pay very little attention to what the chinese have to say. anyway who can tell me what chinese gdp numbers are within 3% is a genius. they can do better than that, and he wants to make sure that the two new gentlemen who will be taking over next year for the chinese premier, wen jiabao, have a number that they can
better. gdp is probably in china, probably far above 7.5, he had to put a low-ball number on it. anybody who knows what gdp in china is within 4% is a genius. >> you wouldn't change your strategy on kmoodties one bit? >> i wouldn't change my strategy on commodities one bit predicated on the premier's comments one bit. >> what about the decision to stop cotton exports. what do you do on that front? >> that was a shock. i have to say nobody, nobody that i know in the cotton business was looking, expecting this to occur. and it leads me to believe, what's going on, this is something i found very unusual. caught a lot of people completely offguard. and ha does it speak to for other production in india? i must say, i have no position in cotton. i grew up in the cotton business, but this one caught me offguard. thankfully, i'm not short. i think what you are seeing is it's playing out over in the grain markets. what corn is doing. it's up almost 10 cents right
now, predicated on what's happening in the indian cotton circumstance. what's going on in cotton, in agricultural production across the board in india. that's the question that it raises with me. >> finally, give me your take on what oil does from here. >> it depends on which type of oil, if we're talking about -- >> we can take, whichever one first. let's take them both. >> i think that brent -- i think both of them tend to trade lower, not higher than these numbers. and i think if there's one trade to be done. you have to be careful with it. the spread between that gas and crude oil is going it narrow over time. i think, i'm pretty comfortable with that. i haven't put the trade on yet. i'm thinking of it seriously, if you made me take a position in crude oil today, i would probably sell it, but i wouldn't sell aggressively. >> brent crude we're looking at here as we're on the air, the highs of the day, 124.31. dennis, good to talk to you, as always, we'll have you on again soon. >> dennis gartman, of the gartman letter. >> i was talking with joe about the cotton trade in particular. because when you see cotton and
you realize that it was over $1 higher than this, in in other words, traded up to the record highs of nearly $2 a year ago or something like that. and now trading under $1 and people wanting to get more for their cotton, how do you do that? you basely release less natural gas, that's how you pump up natural gas prices. same thing here with cotton, as far as how india is playing it. >> grasso, do you want to stay away from some materials? energy? because of china? dennis gartman said he wouldn't change his commodity strategy one iota, would you? >> at the short-term, stay away from it. it will probably be a blip compared to what jon and dennis said. the dangerous thing is you want to get drawn into these nat gas equities, that's a mistake, it's too early if i want to play nat gas, i would buy the commodity itself. >> a couple of things on the commodities space. with india reducing what they're doing in terms of exports of cotton, understand, global inventories of cotton have risen
to an incredible swelling level. that's the reason for it. in terms of the commodity space, we said last week, scott, you will know over the next three months, what commodities are fundamentally challenged. the tape today, oil is telling you that. you go to hornback offshore, which is hos, you look at the uso. oil continues to march higher. then you look at the steel names, you look at the coal names, which a lot of our viewers own right now and there are fundamental challenges in those names. you have to look at your positions. and your holdings in question yourself. patriot cole trading 6.25 right now. this was a name talked about as a potential acquisition target. and you look at the axe base, cf industries trading down. there are fundamental challenges. >> what do you do with a bhp or a rio tinto, stocks that are -- >> or freeport -- >> anything that's affected in the copper trade? if the world's largest user of copper is going to slow, you want to stay out of those names?
>> i think you do. i think you take pause on that i've seen much of the price rise here in the fall of 2011 early in 2012. inventories are tight. but we've gotten the move in terms of price action. the risk right now to staying aggressively long. i don't see it. >> scott, let's give a little credit to abigail doolittle on friday. we mentioned the breakdown, it was obvious when you looked at the chart, but no one was calling for this type of a pull-back this quickly and that's what happens with these markets. obviously you get a little whiplash. but still the chart looks very challenging. >> what happens is, is grasso, you know this as good as anybody. it's that the technicals can tell one story, right? when you get the technicals and the foifrt fundamentals lining tell a similar story, that's when you get a potential real move in some of those names. >> the other guys just told you they don't believe what china says. so if you can't believe what china says, you have to look at what the technicals say. because no one has a clear fundamental story all across all sectors in this type of market.
so you have to look at the technicals more than ever. >> let's talk about apple here. taking a nasty tumble. falling about 3% in seven minutes just a short time ago. a big block trade. the stock has recovered a bit. is the upcoming apple event, a sell, the news event? dr. j, it has been so many times. the stock running up to a big event. it turns into a sell. we saw $9 million worth of stock. somebody sold in a block trade. >> absolutely. and it appears that perhaps and i don't know yet. because we're researching it, whether or not this block of about 16,780 hit the tape, did it go into a dark pool first and people saw it and raced ahead of it? that's what it looks like based on the chart and the waterfall pattern that you see there and the subsequent bounce. so in other words, somebody took some money off the table. other people saw that they were about to take money off the table and may have, if my data is correct, raced ahead of the trade. now as far as apple in the past, it has run up into the these
events. it is certainly had a monstrous run here. the stock, scott, was what, 465? traded through 500, traded through 545. on the way up to the new record that it hit today. that's not of course just in a one-day trade, i'm taking it from mid december, that's a monstrous move into this announcements and i don't believe apple has put on that much weight that quickly in the past ahead of an announcement. >> you're almost set up for a bit of a disappointment on wednesday. with the new ipad coming down the line. given the fact that expectations are now ramped up so much. everybody figure these know kpasly what's going to be in it. >> and every dollar the stock rallies is nearly a billion dollars in market cap. i mean when you see that sort of situation that i just described about a $70 billion run over you know, just a short period of time -- that's a lot of pressure to put on tim cook and the rest of the folks at apple for the launch on wednesday. >> joe terranova. on the apple trade, do you want it get out of it now?
are you afraid to make that kind of move because of what's going to happen on wednesday, either way? >> an incredible comeback by apple, trading near 540 right now. my move is to short apple. we talked about this, two weeks ago, i shorted apple. i think the next big move is to the down side here. great note from goldman sachs last night. talking about how these events are perceived to be sell the news events. but yet on the other side of that, the stock tends to come back a little. so i'm looking to sell, one trade i would, identify for you, second derivative trade off apple, serious logic, take a look at the price action today, it's problematic if you're long, you should be paring back your holdings. >> the pops and drops that might be on your radar. start with pandora popping 6%. j? >> i do use the service a lot. i'm a user of the free service, i like it a lot. it is one of the stocks like yelp last week with the big pop that's part of the social media frenzy ahead of facebook. >> do they have earnings tomorrow?
>> i think they do. >> netflix dropping 3%. jb? >> yeah i think netflix is getting harder to dislike. but you know, i really don't have a lot of clarity whether or not this is going to be the next hbo or if it's going to stay a streaming service of other people's content. i don't love the content business, it's not an area i want to be. i think it's a trade you probably walk away from. >> and joe, fcx, it's down 5%, i think i know why. >> this is a buy and dip story. i don't know necessarily that the dip has been corrected deep enough right now. i would not be looking to pick it up here just yet. >> bp popping 2%, grasso? >> clearing a lot of headwinds, still more in front of it. i would still rather play with others. >> yahoo to reportedly undergo another extreme makeover. is it too little, too late? plus a zynga bull turns its back on the stock. is it the right call? our traders break it down, lots more halftime report on the way. want to beat the street?
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want the u.s.-centric focus. i think there is the potential that you could see a rise in yields. >> joe, you said buy calls and wells fargo. the stock is down today but up 4.5 since you made the call. today wells fargo said it's planning to expand into 20 international markets. >> one of the better names out there. management has not identified what the path is for 2012. on all the banks, i want to wait until i get friday's unemployment report before i do anything further. goldman sachs, which i bought last week, if it pulls back further, i'm going to add to that position. >> jb, were you going to say something? or are you just ordering a pizza on the other line? okay. i heard him like piping up in my ear. i don't know. next trade, yahoo an i had new ceo, scott thompson reportedly planning a massive restructuring of the company, includes thousands of layoffs.
our next guest says he's making right move and a radical transformation is needed. ben shakter joins us now. >> a this is a company that has to do something. the world is changing, people are moving to use the internet in different ways than they have in the past andrea hoo needs to transform their business. >> firing a bunch of people doesn't transform a company into the cloud. what happens? >> we don't know the specifics of what he wants to do. but scott comes from paypal where he did a great job. he knows how to turn businesses into transaction businesses. i think what they're going to try to focus on is getting their users to transact and focus on commerce and commercial activity. >> this is the report from kara swisher at all things digital. that's where this emanated from. they're targeting public relations, weaker regional efforts. how successful can they possibly be? i mean is there a future and a
viable one at that? for yahoo at this point? >> i think there can be. but nobody is going to give this company the benefit of the doubt. the company has been trying to transform itself for a long time. this is another new ceo we've had a few over the last number of years. so people need to see what the plan is. and then actually see them execute against it you should not get ahead of this and say, hey, just because they're firing people, they've solved their problem. they clearly haven't. >> doc? >> quick question about the paypal mafia we hear that a lot, especially from the private equity firms about how much they respect folks that came out of there. similar situation here. and people will probably give them enough rope to hang himself at least. and will they give him enough time to hang himself? >> you have a backstop because you have the asia assets, that's supporting the stock. what's going to happen to yahoo going forward, the yahoo company we know in the u.s. will depend on what scott can do to turn it around. there's not a lot of value in the stock right now for the asset. most of the value in the stock
is just the asia assets. >> talks on asia are stalled. the point here is ben, i guess your opinion is, there's just no reason to own the shares here. right if you take a look at what you would think a transformation would take in terms of timing, look at hewlett-packard, look at research in motion, there is no quick fix when a situation has gotten as dreadful as it appears to be at yahoo. >> and in fact, outside of the asia assets, the real problem is yahoo's search business, as people are accessing the internet through mobile devices, there's no point to using yahoo search and that's by far their most profitable business. so i think scott sees that, he sees what's coming down the road and he figures he needs to transform the business if they're going to stick around. >> you've seen significant declines on the part of yahoo in terms of market share. on the other side of that, google increases. what's your take on google target? what are you thinking? >> we like google very much. we think this is a company that's going to transform how people use the internet. they're looking in all sorts of different areas, getting into
video, into display. getting into google. what they're drying to do with google payment. they have a lot of opportunities. they're not trying to change what they've done in the past. they can continue to benefit from everything that's happening with search. yahoo is the opposite. they need to transform the whole business if they're going to survive. in terms of how people are using the internet going forward. >> josh brown, i'm curious if you think that the dan lobe thing is going to matter. if it's something that might affect change near-term. and what would dan even want to do with this situation in your opinion? >> well you know, i don't think it matters thatch. you've had a number of activist shareholders into the stock over the years. it's never really changed things that drastically. what you have dan proposing is hey, we want new directors, we want a new direction for this company. i don't think there's anyone at the company who disagrees with that. he's preaching to the choir, they do want to change things and transform. it's a matter of how to do that best. >> it's the only reason are you a frayed to put a sell on this,
because of the asia assets. that once they move that asset, that the stock will likely get a pop here? >> this whole stock really depends on the asia assets. do you believe that they can figure out a way to get the full value out of those assets in a tax-efficient way? if you do, you own the stock and it's going to go higher. but if you don't believe that, and i don't right now, because they've been trying to do it for so long, i can't recommend the shares right now. >> good deal, we'll talk to you soon. grasso, trade yahoo for me? >> most people see it the way ben sees it. most people are staying away from yahoo. way down on their list of what they want to acquire when they're rotating in and out of stocks. i would not be a buyer of yahoo. >> next trade, zynga getting hit today after jp morgan downgraded shares on the social game developer. the analyst says potential upside shares in zynga shares already priced in. and zynga's introduction to online gambling will take some time. i don't think i've heard anybody on the desk say anything positive about zynga. >> i think what's positive about
ziynga is they're doing the smat thing long-term strategically. they want to build their own platform and not being 100% reliant on facebook. for near-term investing, that's kind of an unpalatable things. that's the case for staying neutral and kind of avoiding the stock right here. >> i agree with josh. that i think that is the case, josh, because they have to prove that they can build that platform rather than just having that parasitic relationship with facebook. and when facebook comes out and is trading, which is not going to be this week, but when it does come out, then i think many of the social media plays that ran up, whether it's pandora, yelp or zynga, are going to get hit as people bail out of that and take what they really want. >> shaking your head. >> i think all of these social media plays, except for facebook. they're all guilty until proven innocent. >> next on the halftime report, guys, who like to shop in the company's cashing in on this
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money halftime report. how is one of our fast money traders playing the market pull-back today? let's get awe real-time trade from steven weis. you're not on the program, but it doesn't mean you're not active in the market. what's up? >> always active in the market. i added to my short today. i've been short steel, global growth concerns. they're also away from that. increasing capacity coming on in china. more steel from europe coming into the u.s., all pressuring prices. so i have been short mt, also the middle. i added to the short position, shorting u.s. steel. and basically the story is that i'm not surprised by this 7.5% targets for gdp in china. that's been well advertised, actually. however, the property bubble is really bursting. you've got three cities come out in the last couple of weeks, the biggest of which is shanghai, attempting to relax the property
market. shanghai said it's okay to own a second home. something you couldn't do. but the central government came out and said -- no. we're still going with this. we want to lower property prices. so the bottom line is, that takes steel to build property, build commercial, build residential, and the government wants to crush it. so you have companies that u.s. steel, they don't make money and it's forecast way too aggressive this year. even if they meet their forecast, it's still the 10 multiple. to me that's absurd. >> let me get a comment from grasso who dabbles in the steel space as well. grasso, who how does the steel trade sound to you? >> i'm with it. three times straight with steven weiss. if i did have to pick a bottom in any of the steel space, it would probably be my favorite, ak steel. and he knows why. based on electrical steel component. >> all right, guys, they say weiss, we'll talk to you again soon. we appreciate you bringing the trade to us. if you take a closer look at the
luxury boom. you'll see men shopping like women. american designer coach is catering to this new group of male luxury buyers. courtney is here to reveal the luxury gender twist. >> the men's luxury market, outperforming women's in all categories and american classic coach. you talk about it a lot, is catching on and cashing in. since the march 2009 market lows, coach shares are 554%. and the majority of wall street analysts think shares still have room to run. coach began as a men's business more than 70 years ago. the company now coming full circle. men's accessories now the brand's biggest growth driver. greg unis, the vice president of men's merchandising for coach tells me he expects the division to grow from $200 million, to $1 billion. in the next three to five years. and the company plans to do it by selling the man bag. it's no longer an urban myth, it's a best-seller. coach has a hard time keeping the sling pack in stock around the world. and the luxury teller is also counting on china.
according to coach, men represent 45% of the 3.2 billion accessory market in china. that country's population, more than 1.3 billion people, that can add up to an awful lot of those man bags. so while there is concern that the chinese economy is slowing, many analysts tell me it's baked into the stock prices for companies like coach that count so much on the chinese consumer. >> all right, court, thanks. >> look for that tonight. you can be sure to catch the premiere of "luxury boom" the new big spenders tonight, 9:00 p.m. eastern on cnbc. grasso, the man bag that you carry around -- >> it's not a man bag, it's a tote. it's monogrammed and i use it to keep all your fan mail organized, scott, you no he that. >> it's a satchel. >> that's not luxury. coach. >> love coach. one of the reasons you love coach is 67 or 68% of revenues, domestic base here in the u.s. you also have to like tommy hilfiger, calvin klein brand, that grasso sports so well. pvh, that's your trade.
similar type of earnings story. and lastly, don't forget michael kors, get close to 50, pulling back a little, i would buy it. >> ralph lauren, it's like you read my mind. ralph lauren, take a look at a five-year chart, just as courtney laid out for us in coach. this is double that. 2 x what coach has done, ralph lauren has done over the last five years. i still like that one better going forward. next up on the halftime report, find out if the smart money is going long crude. plus, is there a market for nat gas-powered pickup trucks? that trade coming up. it's getting crowded
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is welcome back to the halftime report. let's check in on the top three trades we're watching halfway through the halftime show. first up, the vix, surging with the down tape, closing in on 19. >> a number of people have pinged me on twitter, judge, asking me, hey, doc, if the market is down less than 1%, why is the vks up 7? when it's in the teens to make a 7% move isn't a very big move. also the futures made up outsidesed move to the upside. people looking to protect either ahead of those two big market-moving events this week. one, apple on wednesday, and of course, the employment data on
friday. >> all right. second on our list, ibm rising above $200 earlier on the session. >> love it, finally got the date for 200. the ibm story, remains intact. you put a stop in, that's what i'm doing. stop in somewhere around 194.5. but i'm going to beat up the analysts. the analysts have been way behind post earnings on ibm. 15 buys, 14 holds? one sell? come on, average price target, 199.32. that's one of the reasons why it keeps going higher. the analysts have gotten this completely wrong. >> take a look at our third top trait. walter energy, down more than 5% today. grasso? >> the environment for a coal space is challenging at best. you know when you have plants that can choose between coal and nat gas and oil, oil is off the table and nat gas is the easy bet compared to running it on coal and now you add into that environmental issues, i would stay away from all of these coal names and most of them are on their butts, getting kicked into
the 52-week low area. i still wouldn't buy them. >> let's stay with the energy story here. take a look at the chart from the cftc. managed money oil longs at a record high, 12-1 versus short positions. they spiked in february as oil prices rose more than 8 %. does this say anything about crude's next step? our next guest says yes. and that he sees an uptrend in oil despite the recent pull-back, let's bring in mike harris, the director of trading at campbell. welcome back to the show. >> thanks for having me. >> where is oil going from here? >> if you look at the technicals, we've consolidated between 105 and 110 in wti crude. the market is obviously taking a breather here. waiting for its next signal. from a demand standpoint, obviously we've seen a couple of issues overnight, china coming out and revising their gdp down to 7.5%. looking forward. that's a bit concerning when you think about fact that so much energy demand comes from the emerging markets. also on the demand side, i think the market is still you know, taking into account what
bernanke didn't say last week. in his testimony regarding quantitative easing three, that's been a big driver of stocks and commodities over the last few months. if that's off the table, that may also stop. but hey, this hasn't been a demand story, it's been a supply story. tensions with iran obviously continue. we're operating at very low global supply levels. according to recent data. so i think that overall, the market can test the highs, it can get through 110, we can move up to bigger technical points at 113.50. even get up through 115, the high from the libya crisis last year. >> what are your models saying the stock market will do if we get to that point? >> our models are pretty much price-based. they're looking at the same up-trend in equities we've seen in the energy markets. but from a fundamental standpoint as a trader, i know that $4 gasoline is going to be an impact on the consumer. just this weekend i filled up the 26-gallon suv tank at $3.77 with regular gas and hit $98. we're getting to the point where you know, we're starting to be
north of $100. and remember, all of those gas stations for most part, precharge you for $100. so once you go north of that, you've got to put the credit card in a second time to fill up a lot of the tanks. that's going to have a big impact on the consumer. >> how do you play that versus the improving jobs number. does friday's job number, if it's positive and perhaps much more positive than anticipated, does that then off-set the outlook for what higher gas prices would in turn do to the consumer? >> i think that's a good point. we're all watching the jobs number. bernanke mentioned the strengthening labor market last week. and as we go forward, we'll continue to watch the employment picture and all of the u.s. economic data. if we think back to what really was propelling markets with qe2 in 2010, it seemed like on days when we got negative economic data it assured we would get more stimulus, which sent the market higher. i think it will be interesting to watch the data figure on friday. >> where do you see nat gas prices going from here?
i mean we're going to talk about general motors and these bifuel pickups in a moment. but give me a take for what you see nat gas doing? >> a complete opposite story. natural gas, supply levels continue to stay high, we know in the northeast, that it's been an incredibly warm winter. so nat gas prices continue to drop. if you look at the cftc data on the natural gas side, obviously, there were some people out there that were trying to pick a bottom and go long. we've seen a lot of those people give up on the trade, shorts are increasing in that side. and i think that just in a matter of days here, we could take out the lows again. and the down trend in natural gas might continue. >> mike, we'll talk to you again soon. >> thanks for having me. >> mike marist of campbell trading. next, general motors will offer bifuel pickup trucks powered by natural gas as they look to catch the growing wave of alternative fuels. let's get the take on the trade. who says the moves make sense. reason to own the names simply because of that? >> no, we're early in the
recovery for u.s. auto sales, pricing has improved and the overall fundamentals of the automakers has improved permanently to what we've seen in the past 15 years. there's a lot of reasons to be excited about the stocks and the valuations are still very cheap. particularly as the pension underfunding issue has not been as severe as investors feared over a few years ago. >> how long is it going to take to adopt this new bifuel? >> it will take some time. the initial customers we think will be have the most interest will be your fleet customers. the key question is can get gm get retail demand. the pay-back to the consumer has improved on compressed natural gas to the sweet spos, two to three years. that's why we think gm is introducing these lines of vehicles today. it will take some time before we see how much traction compressed natural gas can have particularly with the retail consumer. >> on the conversions to natural gas, if you look downstream, who is the biggest beneficiary in the the names you cover? >> we think from the auto company that's the automakers
themselves, because these are large vehicles, they're very profitable vehicles, if you can improve the pay-back to the consumer, that means more demand for the automakers on the most profitable segments. >> so just let me just stop you for a second. if i go downstream and look at the jci, there's no dramatic impact here to the bottom line off this conversion? >> not too many suppliers that we can pinpoint at this time. again the conversion itself is not very complex. there's no technological feat in making the actual conversion go. we think the biggest beneficiaries themselves could be the automakers that can improve demand for these very traditionally fuel-inefficient vehicles, also their highest-margin vehicles that could be a faborable mixed impact to their profitability in the years ahead. >> the name you want to have in this discussion are clean energy fuels, cnle and look at westport. those are the enablers if other fleets are going to follow suit. those are the types of stocks that could get some serious action as this thing matures. >> quickly, do you see further
upside for a name like general motors which is already obviously had quite a run? would you rather be in some of the parts names that people on the desk here mentioned specifically on friday, do you like the delphi's, borg warner, et cetera? >> we think most of the upside is at the automakers, they have lagged. we think gm still has room to go they are very inexpensive. even under the old valuation methods for the bad auto industry, there's more room to go here. >> good to have you on the program. guys, the automakers or? >> i happen to agree with him about the automakers rather than the parts companies here. until somebody comes out with a part that is either a lot cheaper to install, easier to install, for the conversion process that he spoke of. and if it's not for that conversion process, then you just got if go upstream to the manufacturers themselves. >> westport, ticket symbol, wprt. >> you guys went back and forth
last week constructively on a number of the parts names, right? >> for me it's borg warner. they continue to outperform and execute well. but jon just said the conversion for the break-even point of two to three years, i think that's way long for anyone to be looking at this as a buying opportunity for just the automakers, i would be playing with the bwi. next up, we're rolling the dice on a stock one analyst calls a real fast money name. we'll reveal it, next.
coming up next on "power lunch," reports that yahoo is set for a massive restructuring, what could mean more the company's future. and with china in the headlines, find ott where jpm's richard madigan is seeing the most opportunity for growth overseas in a "power lunch" debate. how safe is your money market fund? should it be regulated more tightly. that's coming up next. now back to scott and the gang. >> the las vegas sands getting an increase in price target, credit suisse is calling the stock a fast money name. joel simpkins with more on that. >> how are you? >> i'm good, although when i look at the call, the first thing i think of is macao, china growth not ha some expected. how worried should we be?
>> 7.5% is still remarkably strong growth. my view is the data is still backward-looking. year-to-date. the average analyst on the street is looking for 14% growth. i think it tells you there's probably an upward bias to numbers yet to come. >> make the bull case, why is it such a good fast honey name for traders? >> this is a large liquid name, the point we brought up. this is a stock that more and more portfolio managers want to use as a default for gaming. mgm, which is liquid, is still very much a las vegas recovery story and has a much more heaviered balance sheet. >> when the controversy surrounding wynn, you don't have it on the surface, anyway at the las vegas sands. >> you have it to some degree with the fcpa and the investigation. i think most investors have viewed that as not a huge factor at this point. likely to be resolved at a later date. not a game-changer at this
point. >> as far as the macao on the one hand and cotai on the other it seemed wynn got a lot of lift based on what they said about the cotai project. what do you favor? >> i think they'll get the final approval. near-term, we're excited for lvs, they have the sense cotai central, which has been under construction for five years, it opens up in april, our estimates are very conservative. investors want to play the companies that have a growth pipeline and rye in and out, lvs has the most visible pipeline in mac macao. >> when you look at the revenue stream, it's macao, it's vegas, it's singapore. are there anything else that we should know about as far as las vegas? there's many of them that we don't even hear about. that we're not even scratching the surface on? . >> las vegas is about 20% of the ebita.
they have a very small casino, small, profitable in bethlehem, pennsylvania that people forget about. i think near-term in terms of the next catalyst, you'll start hearing about japan as a big driver. we expect the regulators there to introduce regulators there t introduce legislation shortly. we think lvs will be on the short list for gaming license in japan if that does happen. >> j.b. >> i'm just curious. what is the revenue mix china, kotai, macau versus u.s. on lvs? >> still north of 70%. >> okay. >> if you look at the casinos in macau, it's about 80%, 85% mainland china. >> thanks for coming on the show. >> on friday i made a bad call on wynn. wynn was above 130, i said it was going to go. it has not gone. line in the sand on wynn is 121.50, the stock is trading 123 right here, below there the call is completely wrong. >> all right. good stuff. >> i like what he had to say about lvs and i still like wynn especially down at joe's level. i don't see the catalyst on the
table to have to make a trade right now on any of the names though. >> j.b. >> yeah. i think that's exactly right. if this thing's going to trade with china, i think the move is you hang back a little bit. and if the selloff gets a little more egregious, maybe -- >> wow. no one wants to be in a casino name. >> i would be buying las vegas right here. buy a third, a third, a third. wait for the china selloff to take place. give yourself a couple of days here. and i'll be buying las vegas as a growth story. it's the best growth story in the casino spot. >> steve, that's 100%, right? a third, a third, a third. [ laughter ] >> i would use the other balance to buy another coach bag. >> satchel. >> next on the "halftime report," unusual activity in a biotech name and we'll answer some of your tweets when we come back. let's talk about the cookie-cutter retirement advice ttd#: 1-800-345-2550 you get at some places. ttd#: 1-800-345-2550 they say you have to do this, have that, invest here ttd#: 1-800-345-2550 ttd#: 1-800-345-2550 you know what? ttd#: 1-800-345-2550 you can't create a retirement plan based on ttd#: 1-800-345-2550 a predetermined script. ttd#: 1-800-345-2550 at charles schwab, we actually take the time to listen -
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welcome back to the "halftime report" show. dr. jay, you have a biotech play. >> yeah. kerx. this one a blog talked about one of the approval due within two weeks, but that's of course why the options primarily are being traded out in april, not in the march time frame because it doesn't give you enough time to be right. however, the stock made an outsized move early this morning. people sold a lot of puts. those were closing trades, we believe. they sold an awful lot of puts that they no longer thought they needed protection, which tells me the stock could go a lot higher. >> let's answer some of your tweets now. the team has been all over the
fio trade. is this still a buy after the recent rally in the stock? grasso, i'm coming to you because you've picked it on the show recently. >> jon picked it as well. we bought it on the same day the ceo was on. look at credit suisse they put out last week, they listed a bunch of new clients that they should -- perspective clients they should have. plus they named facebook and apple as clients. when you throw those names around in the same sentence, i think you're bound to have a great stock price. the upside target was $50. >> all right. thoughts on first solar still a short? jb, any thoughts? >> i would be shorting this stock with three hands. i would see any of those short squeeze rallies where it bumps up 7% or 8% as an opportunity to sell even more. this is a broken stock in a broken sector. high-cost provider, fighting with asia, insider selling, bad accounting. nothing i like here. >> joey, shaking your head yes,
down another 7% today. >> absolutely. both hands, both feet, anything else you can throw in. >> let it bleed. >> for the same reason sreasons? >> sold. the industry's broken. everything's up against it. >> not one guy on the desk is bullish by any stretch. >> i'm not bullish, but i would buy it at some point. i'm waiting for some sort of washout here. i said it had a date with 30 ahead of the earnings when the stock was 36 last wreeek. it banged down to basically 30. now it's 27 and change. if we get the washout, i'll raise my hand and say i'll buy some. >> coming up, final trades from the "halftime report" team. fidelity. now you don't have to go to a bank to get the things you want from a bank. like no-fee atms -- all over the world. free checkwriting and mobile deposits. now, depositing a check is as easy as taking a picture. free online bill payments. a highly acclaimed credit card with 2% cash back into your fidelity account.